Federal Government's budgetary policy under fire as Michael Hüther labels it a scandal
In a scathing critique, economist Michael Hüther, head of the Institute of the German Economy in Cologne (IW), has expressed concern over the current German government's fiscal policies. Hüther, known for his sharp analysis, has accused the ruling coalition of the CDU, FDP, and SPD of resorting to tricks and wasting resources, creating a smokescreen rather than addressing the real issues.
The Union party, as part of the current government, has been criticized for its poor preparation, with Hüther stating that the additional allowance has disappeared on the state level. The SPD finance ministry's actions have also come under fire, with Hüther calling them poorly prepared and criticizing their tactics as a scandal.
Hüther's comments suggest a lack of transparency and questionable practices in the government's fiscal policy. He has questioned where Finance Minister Christian Lindner, a German politician and member of the FDP, found the necessary billions in the core budget. This criticism follows Lindner's rejection of Chancellor Olaf Scholz's proposal to take on loans for the 2025 federal budget without proposing a concrete financing plan, leading to conflict and his dismissal from the finance ministry.
The debt brake, a topic of criticism, remains unaddressed by the CDU and FDP, according to Hüther. He has emphasized the need for "catching up on decades of neglect" and has called for a comprehensive reform of the debt brake.
The state of the federal budget remains a significant concern, with Hüther stating that the government is barely keeping afloat with quotas. The Union and SPD are also criticized for their handling of the debt brake issue.
However, Hüther's criticism does not serve as confirmation for those who rejected a reform of the debt brake from the start. He has made it clear that his intention is not to support any particular stance but to encourage transparency and responsible fiscal policies.
This is not the first time Hüther has criticized the current government's fiscal policies. His previous comments have highlighted the need for a more sustainable approach to Germany’s fiscal and pension systems, echoing concerns shared by many economists. As the debate continues, Hüther's voice adds to the growing chorus calling for change and accountability in Germany's fiscal policies.
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